Demand for public housing priced above S$1 million ($776,940) is surging in Singapore, with the number of units sold so far in 2024 exceeding the total for all of 2023.
The third quarter set a new record for million-dollar flat sales, according to market data released on Tuesday.
In Singapore, 80% of citizens live in government-built and sold public housing, making affordability a significant concern, particularly as the country approaches a general election next year amid rising living costs.
Real estate agency OrangeTee Group reported that 328 apartments sold for over S$1 million in the third quarter, a sharp increase from the 128 sold in the same period of 2023. So far, 747 such units have been sold this year, surpassing the 469 sold throughout 2023.
Although million-dollar flats accounted for only 4% of all resale transactions in the third quarter, they reflect a broader trend of rising resale prices in Singapore’s public housing market, located in one of the most expensive cities in the world.
The Housing and Development Board (HDB) estimated that the resale price index for all public flats increased by 2.5% in the third quarter compared to the second quarter.
According to OrangeTee, the average price of resale flats rose by 3.0%, climbing from S$603,585 to S$621,573 during the same period.
Despite various measures introduced over the years, including in 2022, to contain rising prices, demand for million-dollar flats remains robust. In August, the government implemented further measures to cool the market, including limiting the amount buyers can borrow from state-backed loans.
Still, the government maintains that resale flats remain affordable for most homebuyers. In July, a new record was set when a 111 square meter (1,195 square feet) unit in a prime location sold for S$1.73 million ($1.35 million).
Christine Sun, chief researcher at OrangeTee, predicts that the number of million-dollar flat transactions in 2024 could double last year’s total.
"If there is limited supply in the market, buyers may still need to pay more due to heightened competition for housing," Sun explained, noting that buyers priced out of the private market or ineligible for new flats may turn to resale options, driving prices further upward. Photo by Majush at the English Wikipedia.